Avoiding being the meat in the sandwich between time-paid people and value paying clients

Team Management

We live in interesting times.  Clients want to ensure that they are receiving value for their hard earned money.  People who deliver services usually in the form of time based expertise want to be paid for their time.  Both want to maximise their return - return on money invested for the client, and return on time invested for the service provider.

I recently had an experience which dramatically highlighted the challenge that this creates for small business owners, who are obliged to walk the tightrope required to meet both of these criteria at the same time.

Our business is growing, and last week we took on the big decision to take on new employee. However, after three days of her working with us it became apparent that this lady would send us broke. In three days she achieved virtually nothing.

On Monday, when I made the difficult decision to let her go I asked her the question "If you were the customer, with a limited budget, how much would you pay for what you delivered last week? Her response after some thought was "what has that got to do with anything?".

So here we have a technically competent lady, mid forties in age, who fails to make the connection between value provided to the client, be that us or our end client, and the salary that she is pulling from the business.

Scary????

At the same time I am talking to a client who, thanks to a previous supplier who has totally failed deliver, has fixed budget expectations which are unrealistic.  Even the time taken explaining how unrealistic the expectations are is difficult to justify.  It is as though he has walked into a Rolls Royce dealership with only $50,000 to spend, but dearly wants a Rolls Royce and thinks that wanting is enough.

He is (understandably) not interested in the time / value balance - only in the value.

Add to this mix the government departments who expect tender responses from any potential supplier, including details of the solution proposed for no payment, implementation methodologies that require huge quantities of design documentation in a form that looks good but is functionally useless the quantity of information that is now available online and pressure on prices from offshore suppliers and it is a surprise that any business is ever actually completed.

How have other members solved this conundrum.?


Gill Walker

Owner Director, Principal CRM Business Consultant at

From developing a basic system from scratch when running a Support Desk in the United States in 1991, I understood the importance of Customer Relationship Management, the benefits that it will bring to a business and using technology to support the CRM strategies.. I am a subject matter expert in Microsoft Dynamics CRM. I have worked with all versions of the product, and my skill set includes strategy, scoping, solution design, installation, implementation, support and user training.

Opsis

Consulting and strategy


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Phil Joel

Phil Joel, Director at SavvySME

Gil, your article resonates with me. I used to be in consulting and would often come across such challenges. The reality is you're running a business so you have to make some hard decisions such as being very selective with which clients to work with. Some are just simply not worth it - they end up costing you more money through opportunity cost and become a burden on your business. I would often want to test the relationship with the client early on in the project to see how flexible they are with just a small issue. If they are totally unreasonable with how they approach the issue then you may want to re-consider investing a lot of time with them. Not all customers are equal! I have had the pleasure of working with some great ones and they tend to stick with you year after year which was awesome for my business.

Melanie Macfarlane

Melanie Macfarlane, Director at MMMigration

Thanks Gil. Having just had an employee who we have spent the last 6 months training walk into my office today and state "I am worth more" and "I just had to get that off my chest", without justifying why this is so and taking into account the money we, as a small business, have spent on her training over this period of time owing to her lack of experience prior to coming on board, I fully appreciate your concerns with respect to employees and their expectations. Expectations and managing them are a big part of our business life in terms of both our staff and our clients, and I would agree with Phil above. Once you know who is your ideal client, life gets a whole lot easier. There are always warning signs. I have found that the ones who negotiate the most at the start, including different fee-paying arrangements to the norm, for whom you bend over backwards the most, and generally have the hardest problem to solve, will be the hardest to satisfy. No matter what systems you have in place to maximise your efficiency, these clients will not be satisfied. My prerogative is having happy clients, and so I'd rather not take on these types in the first place. As for staff, I myself am constantly seeking to improve my own management and leadership skills, and it is certainly an ongoing process! It would appear that we live in a world where people expect an increasing amount of bang for their buck, and buck for their bang!

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